Vinda (3331 HK, HK$3.60) – FY12/08A results beat the market expectation

The actual net profit is 20.6% ahead of market consensus (RMB137.5m) or 4.3% higher than the highest estimate (RMB159m), which might trigger a moderate re-rating in short-term. We are optimistic on the company’s performance in 2009 given: 1) demand for household paper products is relatively inelastic and should be minimally affected by the economy slowdown; 2) the steep drop in wood pulp price will reduce the company’s production cost apparently.

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